It's time to blame the clients

The K2 Media Transparency report may be the final in-flight mechanical failure that forces the agency-client relationship into an unrecoverable dive. The headline reads, "ANA Independent Study Finds Rebates and Other Non-Transparent Practices to be Pervasive in U.S. Media Ad-Buying Ecosystem."

It's bad. It's really, really bad, and no one is talking about how really bad it is. How bad is it? It's so bad that if you work for any of the following types of companies you should be concerned:

Any company that advertises on the internet

Any ad agency

Any company that sells internet advertising

Any company that is in any way connected to any of the above

If you work for any of the above and you are not concerned, let me remind you of an old poker expression: "If you can't see the sucker at the table, you're it."

For what it may be worth (from someone who has worked for a behemoth company or two), I doubt we'll get more than the corporate line from the big six or 600 -- however many there are since no names were named. I'm guessing the comments will continue to be in the vein of "We are doing everything we can to work with industry organizations and continuing to clearly communicate the strategic value proposition offered by our firm." I just made that up, but you can sort of see my point. Comments like that are nothing more than pleading the fifth.

It seems like the taking of rebates, obfuscating of margins, and in general, the lack of professional ethics in the agency business have been inside jokes for a long time. Gifts and rebates that affect the outcome of media plans poisoning what should be an unbiased media recommendation are key reasons many people (myself included) went to work for, or founded independent shops. Some people do care about the craft at the end of the day.

The other non-discussed fall out of all this negative press? Even the folks who haven't been what is effectively <expletive deleted> over their clients are being interrogated about transparency. They're (our) integrity is in question because of the actions of others. Once again, it will be the innocents who will be to sent purgatory for the sins of the few. They (we) will have to deal with the fall out (and none of the ill-gotten coinage) of this disaster.

On the other hand, this dramatic change in the value proposition will likely benefit smaller, independent agencies that voluntarily entered into their client relationships (or were forced to) with transparency in mind. You see, kids, if you don't have multi-business unit obfuscation credentials (like the prototypical holding company in-house agency trading desk), it's much harder to rip your clients off. And they know that now.

A few people trying to cash in on some of this misery appear to be buying the report's keywords (they beat me to it) and are offering a transparency pledge (we used to just include language for that in contracts) or even building a business around over use of the word "transparent."

If the report forces a change, agencies that fall into the guilty category will have to unwind a lot of the business units and people these incredibly high margins have afforded them.

Also, if we the people are looking to point fingers, we might be interested in looking in the client direction. Years of driving down fees forced agencies to look for new revenue models. In the agency business, you have to have the talent, if you can't pay for the talent, you won't get the clients.

Media trading desks afforded what they thought was a clean way to generate the missing revenue and alleviate downward pricing pressure. Years of clients demanding more and more while demanding to pay less and less has -- at least partially -- created this manifestation. Technical innovation got confused with strategic thought leadership, and as the former flooded the mainstream, the latter was devalued en masse. Add a systemic helping hand from client side procurement departments featuring a general lack of media buying knowledge and presto, here we find ourselves.

It's a slippery slope, folks.

Of course, if we are going to force transparency, there are a few other things I'd like to see go away as well. The time honored tradition of giving underpaid junior people impressive titles so you can upcharge the client and beef up the statement of work for starters. Need a few VPs on the business? No problem -- change the "A" to a "V" and "E" to a "P." Done, done, and done.

There's also the flagrant gift giving and gift getting. Sure, there are junkets and boondoggles and yachts for rent in France, but it's gotten really out of hand lately. One media agency was all over Facebook recently touting Facebook media sales teams sending over Facebook-branded massage therapists to help get them through media planning. No bias there, kids. Nothing to see here.

Then there's the other company that simultaneously declared itself the single source of digital intelligence by propagating a lumiscape filled with its clients, holdings, and business partners while undermining an entire industry's credibility. In one fell swoop, every company featured in the chart (including many who no doubt were subjects of the K2 investigation) became involuntarily complicit in this ridiculousness and, yet, not a negative word was spoken.

I could go on, but you can see where this is going. I know that you might be thinking if we could pull out all the nonsensical incest from the business, it just wouldn't be advertising. You might be right, but in that light, advertising pre-supposes deception leaving us to wax poetic about the difference between advertising and marketing -- and that is a very low bottom to hit, my friends.

Kevin Ryan founded the strategic consulting firm Motivity Marketing in April 2007. Ryan is known throughout the world as an interactive marketing thought leader, particularly in the search marketing arena. Today's Motivity is a group of...

Comments

Commenter: Jim Meskauskas

2016, July 22

I first broached this subject back in 2009, talking about "ad networks" instead of trading desks. We didn't call them that, yet. http://www.imediaconnection.com/articles/ported-articles/red-dot-articles/2009/nov/why-would-an-agency-want-to-be-an-ad-network/. Then, I said that so long as the agencies were upfront about their offering and what they gained from it, clients shouldn't care too much about it. There are, however, pitfalls I also called out --namely clients unhappy with the double dipping and wanting some of that money back.